Executive Order 007

Nigeria Nigeria's Private Sector Road

Construction for Tax Credit Policy

The Nigerian government's Tax Credit Policy has created opportunities for private sector
involvement in the country's road infrastructure development. This presentation examines
key elements, beneficiaries, and participants.
The Tax Credit Policy
1 Encourages Private
Sector Participation
The Nigerian government
offers tax relief to privately-
funded road construction
projects as an incentive for
private investment in the
nation's infrastructure.
2 Provides a Tax Credit
of up to 50%
Private sector entities that
invest in eligible
infrastructure projects will
be granted tax credits
equivalent to 50% of the
cost of the project over a 3-
year period.
3 Promotes Economic
Growth
By stimulating private
investment in infrastructure,
the Tax Credit Policy aims
to promote economic
growth and job creation
across Nigeria.
Beneficiaries and Participants
Dangote and Other
Conglomerates
Industries
African conglomerate with large
investments in the Nigerian
economy. Dangote Industries has
constructed over 100 kilometers of
roads across many locations in
Nigeria, with a total investment of
over NGN 300 billion in such
projects.
Others participating includes BUA
Group, MTN, Flour Mills Plc
Contractors &
Construction Firms
The Tax Credit Policy targets
privately funded road and bridge
construction projects undertaken by
eligible entities. This includes all
private sector entities that
demonstrate a "willingness to
invest" in infrastructure, including
construction firms. Securitization of
road tax credit allows multiple
private sector companies to
participate and finance road
construction in disadvantaged areas.
Fund Managers
Fund managers can source private
capital and invest in eligible
infrastructure projects, thereby
creating new sources of finance and
bringing in new expertise. They can
also participate in the securitization
of road tax credit to finance road
construction in disadvantaged areas.
Participation Opportunity for Fund
Managers
Gather Resources
Adopt a fund management approach to
gather resources and channel them to road
construction under the scheme in exchange
for tradeable tax credit certificates.
Assess Impact
Creation of structures like Road
Infrastructure Development and
Refurbishment Investment Tax Credit
scheme will inspire institutional investment
in infrastructure and positions the capital
market to be more active in the
infrastructure sector.
1 Identify and Select Qualifying
Roads
Stay informed about infrastructure projects
2 that are eligible for tax credits under the
policy. Identify and select qualifying roads
and road projects that are eligible for tax
credit under the scheme.
3 Procure License as a
Participating Fund Manager
Procure the license as a participating Fund
Manager with the Committee to officially
4 participate in the scheme and manage the
funds for road construction projects.
Securitize and Trade
5
Once the tax credit certificate is obtained,
fund managers can securitize and trade it in
the capital market, providing an opportunity
for investors to participate in infrastructure
development and earn returns on their
Impact Analysis of Executive Order 007
Nigeria
Revenue Generation
The tax credit policy has
generated revenue from private
sector entities into the
infrastructure sector, which is
critical for economic growth.
Job Creation
The policy has enabled the private
sector to create more jobs thereby
reducing unemployment rate in
the country.
Improved Connectivity
The policy has improved
connectivity across the country
and increased overall
transportation efficiency.
improved road infrastructure
brings in more economic
opportunities for local businesses.
19 Eligible Road Projects

19 eligible road projects, totalling 794.4km which have been prioritised in 11 states
across each of the six geo-political zones:

1. a) Construction of Ashaka-Bajoga Highway in Gombe State;

2. b) Reconstruction of Dikwa-GambaruNgala Road in Borno State;
3. c) Reconstruction of Bama-Banki Road in Borno State;
4. d) Rehabilitation of Sharada Road in Kano State;
5. e) Rehabilitation of Nnamdi Azikiwe Expressway / Bypass, in Kaduna State;
6. f) Reconstruction of Birnin Gwari Expressway – Road in Kaduna State;
7. g) Reconstruction of Birnin Gwari – Dansadau Road in Kaduna State;
8. h) Reconstruction of Makurdi-Yandev-Gboko Road in Benue State;
9. i) Reconstruction of Zone Roundabout-House of Assembly Road in Benue State;
10. j) Reconstruction of Obajana-Kabba Road in Kogi State;
11. k) Reconstruction of Ekuku-Idoma-Obehira Road in Kogi State;
12. l) Construction of AdaviEba-Ikuehi-Obeiba-Obokore Road in Kogi State;
13. m) Rehabilitation of Lokoja-Ganaja Road in Kogi State;
14. n) Ofeme Community Road Network and Bridges in Abia State;
15. o) Rehabilitation of Obele-Ilaro-Papalanto-Shagamu Road in Ogun State;
16. p) Reconstruction of Sokoto Road in Ogun State;
17. q) Reconstruction of Apapa-Oshodi-Oworonshoki-Ojota Road in Lagos State;
18. r) Construction of Bodo-Bonny Road & Bridges across Opobo Channel in Rivers
State; and
19. s) Rehabilitation of Benin City – Asaba Road in Edo State”.
mu
Roads Constructed under the Policy
Dangote Refinery Road
Network
Dangote Industries constructed a
35-kilometre haul road in the Lekki
Free Trade Zone to transport
petroleum products from the single
largest oil refinery
Ibeshe Road
Yet another notable road
constructed by Dangote Industries
under the scheme.
Apapa-Oworonshoki-
Ojota Road
A notable road constructed by
Dangote Industries under the
scheme.
Dikwa-Gamboru-Ngala
Road in Borno State
A notable road constructed by
Dangote industries under the
scheme
Epe-Sagama Lot 1 and 3
Another notable road constructed
by Dangote Industries under the
scheme.
Nnamdi Azikiwe
Road
Kaduna
A notable road constructed by
Dangote industries under the
Scheme
Bama-Banki Road in
Borno State.
A notable road constructed by
Dangote industries under the
scheme
Deep seaport across
road sections 1 & 3
A notable road constructed by
Dangote industries under the
scheme
Roads Constructed under the Policy
Atan-Agbara Road
A notable road constructed by
Flour mills of Nigeria Plc under the
scheme.
Kazaure – Kongolam
Dual Carriage Road
Another notable road constructed
by BUA GROUP under the
scheme.
Obele/Ilaro/Papalanto
to Sagamu Road
A notable road constructed by
Dangote industries under the
scheme
WHAT TO DO!

1 SELECT ROADS OF INTEREST

Select from the list of Road, Due Diligence

REGISTER SFA WITH THE 2 and do assessment of costs. Express interest
COMMITTEE AND FIRS AS
to take ithemon under the scheme
PARTICIPATING FUND
MANAGER
Register SFA as participating Fund Manager
with FIRS and the Committee. And mobilise
technical partners. 3 RAISE FUND. BUILD AND SELL

Raise Fund. Build the Road and Sell.

Estimated margin play – 35%-45% on
money per Annum.
- Procurement Profit- 30%-35%
- Scheme Allowance – MPR+2%